New Home Flipping Taxes in BC

 The BC home flipping tax, effective January 1, 2025, targets profits made from selling residential properties within 730 days of ownership, including presale contracts. Imposed under the Residential Property (Short-Term Holding) Profit Tax Act, this tax applies whether the seller is a B.C. resident or lives elsewhere. The tax rate is 20% of the net taxable income from properties sold within the first 365 days of ownership, with the rate decreasing over the next 365 days. After 730 days of ownership, the tax no longer applies. For example, if you purchased a property on May 1, 2023, and sold it on January 31, 2025, the profit would be subject to the tax because you owned the property for 642 days. However, if you sold it on May 31, 2025, after 762 days of ownership, no tax would apply.

The tax applies to any property sold or transferred on or after January 1, 2025, if it was owned for less than 730 days, but it is distinct from federal property flipping rules and is not tied to B.C. or federal income tax. There are some exceptions, such as transfers between related persons (e.g., gifts), where the property may be exempt. For instance, if Michael buys a property from his father, who originally purchased it in 2020, Michael is deemed to have owned the property since 2020, thus exempting him from the tax, even if he sells it within the 730-day window. Similarly, the day you buy a property is generally the closing date, and if you purchase from a related person, the "purchase date" is based on when they first acquired it. The tax’s purpose is to deter short-term property flipping for profit, part of B.C.'s Homes for People Plan.

So what does this mean for you moving forward in 2025? Well you have no worries if you have held your property for over 2 years. If you have owned for less than 1 year most likely you will be subject to the tax, if you  have owned for a period between 12-24 months you will most likely be subject to a portion of the taxes. The government has initiated this program with hopes of fewer people (investors) buying places and flipping them for a profit, in a short period of time. In theory this should make things easier for new buyers to enter the real estate market in British Columbia however it could penalize people who need to sell for one reason or another after only owning the property for under 730 days. 

Details provided by BC government webpage- https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax